JS-TechTrading Masterclass How to pick the Best Cryptos??
The trend is your friend. This is a very old but true quote.
Why is that?
• The vast majority of big winning cryptos and other securities made the largest portion of their gain in a Stage 2 uptrend • Evidence that institutions are buying • Increase probability of success • Know what to expect under specific conditions – point of reference
Your goal is not to buy at the lowest price – It’s to buy at the right price!
Every crypto and other security go through the same maturation cycle - it starts at stage 1 and ends at stage 4 as shown in the chart.
Stage One – Neglect Phase – Consolidation Stage Two – Advancing Phase – Accumulation Stage Three – Topping Phase – Distribution Stage Four – Declining Phase – Capitulation
Our JS-TechTrading strategy focuses on identifying cryptos and other securities in stage 2 uptrends for our LONG-strategies, and stage 4 downtrends for our SHORT-strategies. By doing that, we create an edge over long-term investors and less proficient traders. By focusing on cryptos and other securities in a stage 2 uptrend (LONG-strategies), and focusing on cryptos and other securities in a stage 4 downtrend (SHORT-strategies) we avoid losing money or breaking even over a long period of time and we are fully invested when cryptos and other securities are in a confirmed up-/downtrend so that we can accumulate money within the shortest period of time.
Example Bitcoin:
But how can we use technical chart analysis can be used to identify cryptos and other securities in a stage 2 uptrend, and in a stage 4 downtrend?
🍾🍾 3x US investment champion Mark Minervini 🍾🍾 developed the so-called Trend-Template which can be used to screen for cryptos and other securities in confirmed up- and downtrends.
TradingView provides all of the relevant tools to automate this screening process. ✌️✌️ The following section summarizes the technical characteristics which must be met so that a stage 2 uptrend for a stock can be confirmed:
Trend-Template to confirm a STAGE 2 Uptrend
1. Stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines. 2. The 150-day moving average is above the 200-day moving average. 3. The 200-day moving average line is trending up for at least 1-month (preferably 4-5 months minimum). 4. The 50-day (10-week moving average) is above both the 150-day and the 200-day moving averages. 5. The current stock price is at least 25% above its 52-week low. (Many of the best selections will be 100%, 300% or even greater above their 52-week low before they emerge from a sound consolidation period and mount a large-scale advance). 6. The current stock price is within at least 25% of its 52-week high (the closer to a new high the better). 7. Current price is trading above the 50-day moving average (exception “Low Cheat” setups
Trend-Template to confirm a STAGE 4 Downtrend
The same logic applies here: 1. Stock price is below both the 150-day (30-week) and the 200-day (40-week) moving average price lines. 2. The 150-day moving average is below the 200-day moving average. 3. The 200-day moving average line is trending down for at least 1-month (preferably 4-5 months minimum). 4. The 50-day (10-week moving average) is below both the 150-day and the 200-day moving averages. 5. The current stock price is at least 25% below its 52-week high. 6. The current stock price is within at least 25% of its 52-week low (the closer to a new low the better). 7. Current price is trading below the 50-day moving average.
We at JS-TechTrading only consider cryptos and other securities for our watchlists which are meeting all characteristics of Minervini's trend-template. This screening process in itself provides us with a significant competitive edge versus most other traders are doing.
In the next tutorials, I will explain how automated trading robots can be applied to cryptos and other securities on our watchlists.